CES 2011: UltraViolet Called Digital Delivery `Do-Over'

LAS VEGAS - A multi-industry coalition including Hollywood
studios, electronics manufacturers, retailers and video providers, formally
unveiled at International CES this week a virtual content locker designed to
simplify and consolidate the purchase of video content for playback across
multiple devices.

The proposed system, called UltraViolet, is expected to launch
this summer and will enable the purchase of movies and TV shows as a download for
use on up to 12 devices at any one time, and to be shared with up to six
relatives or friends.

Consumers will be required to register Ultraviolet titles they
have purchased to make use of the sharing provisions. Registered titles will be
playable on up to 12 UltraViolet-enabled devices at one time, and old devices
can be removed as new ones are added for future playability.

An Ultraviolet logo will be placed on compatible hardware devices
and content listings on retailer's ecommerce systems and even on DVD and
Blu-ray packaging - signifying that the purchaser of the disc also has the
right to access a digital version of the title in a vertical content locker
administered through an UltraViolet Account system infrastructure, which was
developed by Neustar.

The coalition, called the
Digital Entertainment Content Ecosystem (DECE), developed the Ultraviolet
platform after seeing shrinking home video sales and revenue in recent years.

Consumer feedback indicated that people are buying less movies
and TV shows because they are frustrated with and confused by their inability
to use that content flexibly across various devices and device brands. Studios
hope that a more flexible solution will both spark renewed demand, and reduce
piracy.

Speaking at a DECE press conference here Thursday, Mitch Singer,
Sony Pictures chief technology officer and DECE president, called Ultraviolet
the result of a collective industry "do-over" on digital distribution.

"Many industries that have rolled out in the past where there has
been a proprietary vertical platform have done do-overs," he said, citing
everything from ATM cards to text messaging systems. "Let's figure out what the
consumer experience should look like if we had it to do all over again."

Walt Disney Studios, which is working on a separate and similar
system called KeyChest, is not part of the group.

Data released Thursday by industry trade organization Digital
Entertainment Group showed that total revenue from DVD, high-definition Blu-ray
discs and digital sales and rentals declined 3 percent in the United States to $18.8
billion in 2010.

Combined sales and rentals of Blu-ray discs, which were up 53
percent in 2010, and digital downloads and streaming, which grew 19 percent,
were not enough to overcome the 11 percent decline in DVD revenue to $14 billion,
the DEG said.

At the same time, less profitable rental revenue grew 2 percent
to $7.8 billion as sales dropped 7 percent to $11 billion.

Although few devices are expected to be Ultraviolet-ready when
the system launches this summer, DECE members expect products including
smartphones, video game consoles, tablets and computers to be upgraded to
support the platform in firmware and software downloads, before devices integrating
the capability are readily available next year.

The DECE lists 46 other members, mostly from the technology side
of the industry. These include: retailer Best Buy, cable operator Comcast,
hardware manufacturers Samsung, Sony and Toshiba.

Noticeably absent from the list is Apple, which is a major
shareholder of Disney, the proponent of the rival KeyChest platform.

The DECE announced this week an evaluation suite of technical
specifications and a licensing program that will allow companies to use the
technical specifications, interact with the UltraViolet Account infrastructure
via a suite of Application Programming Interfaces (APIs) and use the
UltraViolet logo for promotion and marketing of UltraViolet content and
devices.